Can premium tariffs for micro-generation and small scale renewable heat help the fuel poor, and if so, how? Case studies of innovative finance for community energy schemes in the UK

In the UK, the introduction of micro-generation Feed in Tariffs (FiTs) and a proposed Renewable Heat Incentive (RHI) for domestic and small scale schemes have re-energised the market for investment in domestic scale renewable energy. These incentives may provide financial opportunities for those with capital to spend but for the record numbers with low incomes in 'fuel poverty', these benefits may seem out of reach. This paper shows that with appropriate financial intermediaries it is possible for renewable energy incentives to be used to alleviate fuel poverty. Simple financial analysis demonstrates the theoretical potential of FiTs to help those in fuel poverty. Two case studies of renewable energy projects in low income areas investigate how the incentives may be used in practice, what barriers exist and what success factors are evident. The analysis shows that local energy organisations (LEOS) are key if the poor are to access benefits from premium tariff schemes. Low interest finance mechanisms, good information sharing and community involvement are found as key success factors. (C) 2011 Elsevier Ltd. All rights reserved.